[The Following Information Applies to the Questions Displayed Below

question 54

Multiple Choice

[The following information applies to the questions displayed below.]
BT&T Corporation manufactures telephones.Recently,the company produced a batch of 600 defective telephones at a cost of $9,000.BT&T can sell these telephones as scrap for $9 each.It can also rework the entire batch at a cost of $6,500,after which the telephones could be sold for $20 per unit.
-If BT&T reworks the defective telephones,by how much will its operating income change?

• A)Increase by $500
• B)Decrease by $1,600
• C)Increase by $5,500
• D)Decrease by $6,500

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